Correlation Between Korea Industrial and Lotte Rental
Can any of the company-specific risk be diversified away by investing in both Korea Industrial and Lotte Rental at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Korea Industrial and Lotte Rental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Industrial Co and Lotte Rental Co, you can compare the effects of market volatilities on Korea Industrial and Lotte Rental and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Korea Industrial with a short position of Lotte Rental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Industrial and Lotte Rental.
Diversification Opportunities for Korea Industrial and Lotte Rental
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Lotte is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Korea Industrial Co and Lotte Rental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Rental and Korea Industrial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Korea Industrial Co are associated (or correlated) with Lotte Rental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Rental has no effect on the direction of Korea Industrial i.e., Korea Industrial and Lotte Rental go up and down completely randomly.
Pair Corralation between Korea Industrial and Lotte Rental
If you would invest 271,500 in Korea Industrial Co on November 8, 2024 and sell it today you would earn a total of 24,500 from holding Korea Industrial Co or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Korea Industrial Co vs. Lotte Rental Co
Performance |
| Timeline |
| Korea Industrial |
| Lotte Rental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Korea Industrial and Lotte Rental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Industrial and Lotte Rental
The main advantage of trading using opposite Korea Industrial and Lotte Rental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Industrial position performs unexpectedly, Lotte Rental can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lotte Rental will offset losses from the drop in Lotte Rental's long position.| Korea Industrial vs. Echomarketing CoLtd | Korea Industrial vs. Chorokbaem Healthcare Co | Korea Industrial vs. Dongbang Transport Logistics | Korea Industrial vs. Mobileleader CoLtd |
| Lotte Rental vs. KyungIn Electronics Co | Lotte Rental vs. Samji Electronics Co | Lotte Rental vs. GS Retail Co | Lotte Rental vs. Vissem Electronics Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |